Sanctions are not the problem for economy development between Croatia and Russia

For further development of relationship between Republic of Croatia and Russian Federation, Croatian Chamber of Economy and chamber of economy of Russian Federation, with the support of Ministry of economy, Ministry of foreign and European affairs ,organize Russian-Croatian economy forum in Moscow on 17th February 2015.

The leader of the Croatian delegation on the forum will be the ministry of economy Ivan Vrdoljak. As a part of the delegation there are around 60 biggest Croatian companies, that represent whole aspect of economy sector: agriculture, shipbuilding, energetics, transport, tourism, pharmacy, construction and so on…

Minister of economy of Republic of Croatia Ivan Vrdoljak talks about development of Croatian-Russian cooperation during the sanctions.

According to the information we have there is continuous interest of Russian companies for investment in Republic of Croatia, but also Croatian companies for the Russian market and Croatian interest for cooperation on the third markets. That confirms soon Russian-Croatian economy and investment forum which will be held in Moscow, with the aim to improve already existing economy relations with the emphasis on investment possibilities of Republic of Croatia with potential Russian investors, specially in the field of tourism and energetics.

Which Croatian companies have a good perspective for cooperation with Russia in 2015?On Russian market, traditionally well affirmed is Croatian pharmaceutical industry, as well as construction, and good cooperation is with manufacturers of machinery and equipment. There are big chances for development of assortment in food industry, specially in the part of healthy food connected to the tourism for Russia can represent interesting offer.

When we talk about perspective fields of economy cooperation, we can say that there is not almost any area where Croatian company couldn’t be able to cooperate with Russia, except the parts under the sanctions, more because of the fact that Russia represents bigger, unique Euro Asian market (Russia, Kazakhstan, Belarus) that offers big possibilities for Croatian companies.

What is the situation like with MOL, company INA and Gazprom?

About possible cooperation between MOL and Gazprom we can not talk because it is the concern of business decisions of two companies.

But, I can confirm that on the expert level, all the possibilities are analyzed in order to solve the situation where MOL wants to ruin energetic stability of the country and development of INA. Croatian state declared possibility to sell its shares in INA, and also not fulfilling of business plans on development of INA and the decisions contrary to the interests of the state. State as second biggest share holder in strategic important energetic company for Republic of Croatia, shows its responsibility towards state strategic interests. Currently we are faced with arbitration procedures and conclusion of negotiation procedure with MOL. If MOL decides to sell its part of the shares we expect from possible new partner, friendly relation with the state as second biggest share holder in INA, as an aim to develop INA as independent, developed, regional company, which will invest in oil and gas research, refinery, retailing of petroleum products and development of the business in regional countries, and not be someone’s branch.

Which Croatian companies were present on Russian market in 2014?At this moment there is not full information on the number of new companies in Croatia that started a new business cooperation in Russian Federation, and about those who are under final phases of the negotiation we can not talk because it is business secret.

But, there are very encouraging information on development of business cooperation in 2014. After the fall of trade exchange in 2013, which was 1,4 milliard American dollars (USD), in spite of the sanctions, and according to the preliminary information of Croatian Bureau of Statistics, during 10 months of 2014, total trade exchange rose for 25% comparing to the same period in 2013.In total trade exchange from January till October 2014 was 1,3 milliard USD. The export from Republic of Croatia to Russian Federation was 283 million USD which represents the increase of 4,5 % while the import from Russia to Croatia was 1,05 milliard USD, which the increase of 32% comparing to the same period in 2013.

What are the main problems Croatian companies have to face with while trying to enter Russian market?

Formal problems because of the sanctions, and instability of the ruble which represent business risk when collecting claims.

Further more, some Russian rules, norms and customs procedures can be not enough transparent so it can make more difficult doing business in Russia.

There are, of course, certain obstacles not connected to actual sanctions, first of all language difficulty and business customs, and often the fact that Croatian companies are not enabled enough for such demanding market as Russian one, which has extremely powerful competition among foreign but among Russian companies as well.

What do you expect from Russian-Croatian forum in Moscow?

The aim of Russian-Croatian economy forum and investment conference in Moscow is to find the space for development of these relations in the future when there would not be any sanctions and show the initiative from Croatian side concerning that. In spite of current difficulties in business, we would like, in that way, to keep the good economy relations of our two countries. But, in spite of everything, even current situation opens many new cooperation possibilities, from knowledge and technology transfer to mutual investments, Russian in Croatia, and at the same time Croatian companies in Russia, and joined production.

Further more, as many Croatian companies in last years invested significant sources for better position of its products on Russian market, and as Russia still is a part, for them strategic important market, for those Croatian companies, in this situation, the institutional support is very important in order to keep its position on Russian market.

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